1/8" meshing gap is WAAAAY too much. 0.035" is more like it.
I'd guess you are wedging the Bendix gear. You might have destroyed the flexplate teeth and the Bendix gear teeth. You might also have cracked the starter gable, thus wedging the starter axle when the Bendix gear is wedged.

I have done similar things myself , that's why I'm getting so detailed with so little information

Well the 1/8" gap isn't between the teeth when it's engaged! it's between the edge of the flywheel tooth and the smooth part of the starter before the teeth kick out and engage.

the actual gap between the teeth when engaged is the same as a paper clip (I should've explained that better )

From under the car with a torch the flywheel teeth are fine and not chewed, they are a little chewed further round where a previous owner obviously had some issues, and the teeth on the starter are good too

Could there be issues with the wiring further up?

I just can't get it to crank the flywheel or chew it up, or miss with any type of spacers and its given me a bloody headache!

My stock starter had no shims. So when I installed my new one, I didn't use any. It seemed to keep "running" after I got the engine started. So I put one shim in and it worked great. My flywheel is the original one to the 400, as such it doesn't have perfect teeth.

So my suggestion (if everything else seems to check out fine) would be to try one shim and see what happens.

So my suggestion (if everything else seems to check out fine) would be to try one shim and see what happens.

Thanks for the info, my original starter had 1 shim in there, I've tried no shims,1 shim and 2 shims and 2 shims plus some washers on this mini starter...

did you get good bolts with the mini starter? these seem to be the right length but are not knurled... so I bought some stock starter bolts that are knurled as I know they need to be to get it in the right position too, but they're far too long when used on a mini starter (well the engine side is, the other needed spacer washers)

I've tried combinations of these different bolts and shims but still nothing

Man I wish I could just bolt it on with 1 shim and be good to go... never had this much trouble getting a starter to fit and work on any other car!

the starter motor kicks out, engages the flywheel then starts clicking, and it won't disengage until I loosen the motor again

Glad the 1/8 wasn't the meshing! Still - have you measured the meshing all round the flywheel? The sticking (not disengaging) is why I still feel it's not right. Are you useing the front starter bracket? I had a case where it was out of line because of crooked starter bolts. The front bracket was missing and would have fixed the problem (I did build one).

The clicking makes me think of poor power to the starter. Check the plus-cable and check the starter terminal - often the M8 Cu-thread is stripped and the connection is bad.

The solenoid might be bad, if the starter isn't getting enough current when the bendix is slung out.

Glad the 1/8 wasn't the meshing! Still - have you measured the meshing all round the flywheel? The sticking (not disengaging) is why I still feel it's not right. Are you useing the front starter bracket? I had a case where it was out of line because of crooked starter bolts. The front bracket was missing and would have fixed the problem (I did build one).

The clicking makes me think of poor power to the starter. Check the plus-cable and check the starter terminal - often the M8 Cu-thread is stripped and the connection is bad.

The solenoid might be bad, if the starter isn't getting enough current when the bendix is slung out.

Are you sure the bendix is slung out all the way?

I'm pretty sure it is, yeah... I can pull out the bendix with a clip when its bolted on. The solenoid should be fine as I had the starter tested at a specialist store.

I'll test the wiring then and perhaps put some jump leads on my battery for some extra oomph to see if that helps...

Otherwise it's back to getting a rebuilt stock starter which has been a pain in the butt (I got a faulty one that burnt out the solenoid, the recovery guys said theres nothing on the car that could cause the solenoid to jam and catch fire, so must've been the solenoid... got the company I bought it from to fix it, but it still seems dodgy)

I also had the same problem with a mini starter due to low voltage. It was on my Chevy plow truck with dual batteries, but both the batteries ended up being junk eventhough they were only 3 months old. These starters seem to be unforgiving in a lower than required voltage.